Mark & Spencer, that bastion of middle-class comfort, has announced a 1,000-strong traineeship programme. Headlines are triumphal: a corporate giant stepping up to solve the nation's youth unemployment. Let's not get carried away.
First, the numbers. 1,000 places. Admirable, certainly, but set against a youth unemployment rate of 11.6% (that's half a million young people not in education, employment, or training), this is barely a ripple. It's a sticking plaster on a haemorrhaging wound, a gesture that costs M&S a fraction of its annual marketing budget. The real beneficiaries? M&S, not the unemployed. They get a pipeline of cheap, loyal labour, a PR boost, and a chance to shape the next generation of checkout operators and stockroom staff.
Second, the nature of the traineeship itself. These are not full-time, pensionable jobs. They're short-term, low-wage placements designed to give the lucky few a 'foot in the door'. But in today's labour market, that door often leads to a revolving one. After the traineeship, many will be back on the dole queue, their 'experience' only good for a line on a CV that employers ignore. This is not about creating sustainable careers; it's about plugging temporary gaps in hospitality and retail, sectors notorious for zero-hours contracts and high turnover.
Let's talk about fiscal responsibility. The government is falling over itself to praise M&S, conveniently ignoring that youth unemployment is a direct consequence of its own policy failures. Inflation remains sticky at 4%, squeezing household budgets. The Bank of England, terrified of wage-price spirals, keeps rates high, choking off investment. Meanwhile, the Treasury has cut corporation tax to 25% to stimulate business, a gift that has bred not job creation but share buybacks and dividend hikes. M&S's traineeship is a tax-deductible PR exercise, not an act of charity.
What about the market? Investors should ask: is this the best use of capital? M&S has been struggling to reinvent itself for decades. Its share price is flat, its margins under pressure from Tesco and Aldi. Diverting resources into a welfare scheme may please politicians, but it does little for shareholder value. If M&S wants to help the young, it should lobby for lower regulatory burdens or invest in automation to lower prices, thus boosting demand and employment. That's the efficient market solution.
Capital flight is a real concern. Savvy investors look at the UK's youth unemployment and see a dysfunctional labour market, one that screams 'avoid'. Why invest in a country where the next generation lacks skills and where businesses rely on government-subsidised training schemes? The UK's productivity is already abysmal; this is another nail in the coffin of competitiveness.
Let's be clear: I'm not against corporate social responsibility. But I am against delusions. M&S's traineeship is a noble gesture, but it's a drop in the ocean. The real answer lies in sound money, low taxes, and flexible labour laws. Until then, these headlines are just feel-good fluff masking a deeper malaise.
